ART Holdings record revenue increase despite econo...

ART Holdings record revenue increase despite economic headwinds

Audrey Galawu

Amalgamated Regional Trading Holdings faced worsening economic challenges, which impacted on raw material availability, operating costs and liquidity.

The Group’s performance for the year ended December 31, 2023 was negatively affected by currency instabilities and prevailing market rates to pricing challenges and margin erosion on exports.

Revenue for the quarter ended December 2023, however increased to ZWL$58.9 billion, 67% ahead of the prior year while in historical terms it stood at ZWL$49.4billion 583% above the prior year.

Volumes overall were down by 9% with significant reduction in paper where the tissue converting unit was shut down for two months to allow for its relocation to Kadoma.

Export volumes declined by 7% as paper exports were shortened, in order to minimise the impact of the foreign currency surrender requirements given the prevailing unfavourable market rates.

Group CEO, Milton Macheka said the Group will continue to implement difficult short-term measures to safeguard profitability and liquidity to enable the business to withstand an extended period of uncertainty.

“The Group continues its drive to reduce short term borrowings whilst exploring appropriate funding options for its growth initiatives for the core energy storage business. Plans to dispose underutilised land in Mutare are ongoing. We are hopeful that ongoing engagements with the authorities on the implementation of policies that resolve the pricing challenges in the local market as well as measures that support exports will bear fruits.

“The Paper Mill curtailment strategy will focus on the integration of the units with the predominant use of local wastepaper to manufacture tissue for the local market. We envisage that by half year the paper business will be a customer focused single unit with a much lower cost base following the site rationalisation,” Macheka said.

In divisional performance, batteries volumes declined by 14% from the prior year volumes of 91 226 units due to depressed demand and pricing challenges in the market.

Export demand remained strong with sales volumes being affected by foreign currency allocation delays in both Malawi and Zambia as measures to mitigate credit risk were maintained.